The SEPA intra bank payment system, which was due to be introduced across Europe on February 1, is designed to speed up payments and so reduce business and consumer costs by ensuring standard conditions, rights and obligations.

However, with many business slow to prepare for the introduction of the SEPA system, the EU has been forced to extend the deadline for its rollout by another six months.

A recent survey by small business lobby group ISME revealed that only one in four small firms in Kerry were actually ready for the introduction of the new payment processing system. And, of those SEPA ready firms, less than two per cent had actually tested the new payment procedures with their banks.

Firms which had not updated their pay processes ahead of the rollout of SEPA had faced an almost total shutdown of their payment systems.

This threat has now been averted, at least temporarily.

Companies that have not adjusted their systems by the time SEPA is eventually introduced will find that their credit transfers and direct debits will cease to function, meaning some suppliers and staff won't be paid and customer payments will not be received.

Reacting to the announcement of SEPA's postponement, ISME criticised "lazy banks" in Ireland and across the EU for their lack of preparedness in not ensuring SEPA solutions were in place for the business community and the SME sector in particular.